Cryptocurrency Is a Bubble Bound to Burst – crypto.news

Bubbles are revolutions in economies that do not last for long as they lack sustainability, leaving many counting losses. Many have connected crypto volatility to an economic bubble.

Claim

In 2017, while Bitcoin was trading at $5,700, Warren Buffet commented about cryptocurrency.

He said, “You can’t value bitcoin because it’s not a value-producing asset.” He added no telling how far bitcoin’s price will go and described it as a “real bubble in that sort of thing.”

Since there is no telling how long the life span of Bitcoin and cryptocurrencies will be, many believe that it is an economic bubble that could burst. The coin has no backing and can be brought down mainly through the 50+1 % nodes attack.

Rating

False

Facts Check

Bitcoin and other major coins have never been attacked through the 50+1% method. Bitcoin has endured multiple dips and bear markets, and its price never touched the zero limit. When Warren branded it a bubble, it was trading at $5.7K. In 2021, it breached $57K and set an ATH above $67K. 

That statistic shows growth of 10X in four years. The coin’s market cap was around $90B when Buffet commented and hit $1T during its November 2021 ATH. That is another growth of over 10X.

Currently, the coin has a market cap of $567B, which is more than 6X looking at when Warren called it a bubble. The total market cap in 2017 was standing at $1.3T on DEC 16, 2017. During the November 2021 bull market, the crypto space had a total market cap of over $3T, almost three times more. Currently, the crypto space has a total market cap of $2.16T, which is almost two times more. 

The Truth About the Claim

Cryptocurrencies have seen different market cycles and have survived through them. The fact that no one knows how long they will last is not enough to classify them as a bubble that is meant to burst soon. Since Buffet made these claims, the crypto space has more than doubled in value with innovations hitting the market.

NFTs and the metaverse have become widespread alongside the Web 3 developments. Whenever there are such developments and growth, it shows that the market trusts the product; therefore, the future of the product is almost sure to be brilliant.

In 2017, no country had officially legalized the trading of cryptocurrencies, although local authorities like city governments were already looking into it. Then, regulation was still a thing of the future. At the moment, several major economies like the US, EU, Russia, and others have clarified that they have no intentions of banning crypto.

They instead want to support it to foster development and innovation in the fintech industry. Two countries have already adopted Bitcoin as their legal tender, with others are looking into it, as El Salvador’s President communicated at the beginning of the year. Several major institutional investors like Facebook’s Meta, Microsoft, Berkshire Hathaway, Nike, Adidas, Mercedes, Twitter, Tesla, and others have already invested in crypto, accepted crypto payments, or confirmed their blockchain technology adoption.

These developments have happened four years after Warren Buffet said that Bitcoin and co. could be great examples of economic bubbles. He was wrong on that. However, the FUD is still surfacing, with many people believing that only time will tell if the crypto space has the power and ability to hang on, survive and prosper in the future.

The answer is simple. Check the historical evidence of the crypto market. Whenever Bitcoin crashed hard, it gained more significant momentum and set new ATHs. Also, the adoption rates of these assets are spiking, showing that their chance of survival is very high. Although it may not be 100%, the crypto market has proven that it is not a bubble waiting to burst!